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METALS-London zinc extends gains on tight market, weaker dollar

MELBOURNE, Jan 29 (Reuters) - London zinc surged nearly 3 percent on Monday to its highest in more than 10 years, with a weaker dollar triggering buying amid bets that tightening global supply will propel prices even higher.

FUNDAMENTALS

* London Metal Exchange zinc rose 2.9 percent to $3,577 a tonne by 0144 GMT, the highest since mid-2007. In Shanghai prices climbed more than 3.6 percent.

* Under-investment in zinc mines during the economic downturn over the last 10 years has led to shortfall of the metal: LME zinc inventories have slumped below 180,000 tonnes, of which less than 100,000 tonnes is available to market - the least since 2008. In China, exchange stockpiles ticked higher last week but also remain close to 10-year lows. <ZN-STX-SGH> <MZNSTX-TOTAL>

* LEAD, NICKEL: Sister metal lead and steel-linked material nickel followed in zinc's wake, both up by more than 2 percent.

* LME copper climbed 0.9 percent to $7,145 a tonne, erasing losses from the previous session. Shanghai Futures Exchange copper edged up 0.1 percent 53640 yuan ($8,481) a tonne.

* USD: The dollar wobbled near three-year lows against a basket of major currencies on Monday, struggling to pull out of six straight weeks of losses amid its evaporating yield advantage and doubts about Washington's commitment to a strong currency.

* U.S. ECONOMY: U.S. economic growth unexpectedly slowed in the fourth quarter as the strongest pace of consumer spending in three years resulted in a surge in imports.

* INVESTORS: Hedge funds and money managers cut their net long position in COMEX copper contracts in the week to Jan. 23, U.S. Commodity Futures Trading Commission data showed on Friday.

* COPPER STRIKE: Chile's Codelco has struck a contract deal with workers at its Andina copper mine, it said on Saturday, as the state-owned company tries to reach advance agreements with some unions in a year expected to be rife with labour negotiations.

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MARKETS NEWS

*Asian shares looked to extend their recent bull run on Monday amid upbeat corporate earnings and strong global economic growth, while more rumblings from the White House about "unfair" trade practices kept the U.S. dollar on the defensive.

DATA AHEAD (GMT) 1330 U.S. Personal consumption Dec 1530 U.S. Dallas Fed manufacturing index Jan PRICES

BASE METALS PRICES 0148 GMT Three month LME copper 7143.5 Most active ShFE copper 53650 Three month LME aluminium 2264.5 Most active ShFE aluminium 14750 Three month LME zinc 3574 Most active ShFE zinc 27145 Three month LME lead 2646 Most active ShFE lead 19750 Three month LME nickel 14015 Most active ShFE nickel 106660 Three month LME tin 21750 Most active ShFE tin 149720

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 973.66 LME/SHFE ALUMINIUM LMESHFALc3 -1885.89 LME/SHFE ZINC LMESHFZNc3 306.4 LME/SHFE LEAD LMESHFPBc3 -426.93 LME/SHFE NICKEL LMESHFNIc3 1609.15

($1 = 6.3250 Chinese yuan renminbi)

(Reporting by Melanie Burton; Editing by Kenneth Maxwell)